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Source says govt may cut palm oil import duty by 400 bps by Dec-end

Wednesday, Oct 31
    
    –India may cut CPO import duty to 40% by Dec end vs 44% now
    –India may cut import duty on refined palm oil to 50% vs 54% 
    –India may cut palm oil import tax to comply with trade pact

    By Kaushal Verma 
    NEW DELHI – India may soon slash import duties on palm oils to comply with a trade pact signed with Southeast Asian nations, easing its close guard against imports of cheaper farm goods.
    By December, the government may cut import duty on crude palm oils to 40% and refined palm oils to 50%, each by four percentage points, a senior government official said.
    Currently, crude and refined palm oils attract import duty of 44% and 54%, respectively.
    The duty would be reduced to comply with the Association of Southeast Asian Nations-India free trade agreement, which has a sunset clause on import tariffs.
    Under the preferential tariff pact, the bound rate for India’s import is 50% for refined palm oil and 40% for its crude version, effective Jan 1. 
    “India has signed an agreement with ASEAN members to lower the import duties on palm oils with effect from Jan 1. Current duties are higher, so they have to be lowered by December end,” the official said.
    India is the world’s largest importer of palm oil, while Indonesia and Malaysia are the leading producers.  
    “Governments of Indonesia and Malaysia have requested India to reduce the taxes on import of palm oils, but we will not lower it below the bound rates,” the official said. 
    Higher duties in India have been hurting exports of Southeast Asian countries.
    During Nov-Sep, India’s palm oil imports fell to 7.9 mln tn from 8.5 mln tn in the year-ago period, according to data from Solvent Extractors’ Association of India.
    The government had last increased import duties on edible oils in March to stem imports of cheaper edible oils, and safeguard the interests of domestic refiners and oilseed growers.  End

Edited by Avishek Dutta

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